By Scott Wright
START-UPS in Scotland’s burgeoning tech sector will fail and thousands of jobs will be put at risk without direct cash support to help one of the country’s most promising industries through the current health crisis.
A stark warning of the threat posed to the sector has been outlined by a survey of more than 100 tech start-up founders and senior executives, with an overwhelming majority (95 per cent) stating that the Covid-19 pandemic has already had a negative impact on their business.
Nearly 40% have furloughed staff, 21% are considering redundancies and half are freezing or scaling back hiring, the survey commissioned by Turing Fest, the organiser of a major European tech conference and investor showcase, has found. More than half (52 per cent) stated the Scottish Government is not doing enough to support entrepreneurs.
Asked what kind of support the industry needs, nearly four-fifths (79%) called for bridge grants to maintain operations throughout the crisis, 67% cited expanded research and development (R&D) and innovation grants, and 59% highlighted wage subsidies.
Alongside the survey, more than 50 start-up chiefs have written to the Scottish Government warning the interventions made to support business so far “will not adequately address the unique needs of high-growth Scottish tech companies”. They urge ministers to “act now to protect Scotland’s entrepreneurial future so we do not lose a generation of high-growth start-ups to Covid-19”.
Scotland’s digital economy is believed to support nearly 100,000 jobs, contributing £6.6 billion to the Scottish economy.
Brian Corcoran, founder of Turing Fest, said: “Tech start-ups can play a key role in rebuilding Scotland’s economy after this pandemic passes, but unless there is immediate intervention from the Scottish Government, many start-ups will not survive and the ecosystem that the Government, and others, have worked so hard to cultivate could be decimated.”
Paul Walton of smart security firm Boundary said, “Countries like France and Germany have already announced wide ranging and highly supportive schemes for their tech industry and whilst the UK government’s announcements last week were welcome, the rules of the scheme mean many Scottish companies will not be able to get support from it.”
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